The Academy

Important Tips On Export Promotion For Your Business

Many entrepreneurs want to export their goods or services but are often confused about what steps to take. When the Federal Government began to export tubers of yam, for example, James Ugocha a yam farmer in Benue State quickly approached his friend for advice on how he might take advantage of the yam export policy!

Some tips by his friend, Abdul Echenum, summarised here today, might be useful to entrepreneurs who may find themselves in a similar position like James.

Export promotion is a set of public policy measures, which could potentially enhance the export activity of a company, industry or a nation. Such policy measures are subject to a variety of factors and regulations that could affect the volume, types of goods and services exported from their areas of authority.

Export development is important to the firm and to the economy as a whole. Export Promotion Strategy promotes only the industries that have potential for developing and competing with foreign rivals in the international market. The main goal of export promotion is to prepare the “potential” industries for competition with the foreign rivals. So these industries at their infancy must be protected by government policies for a while.

Naturally, exporters face increasing competition, in order to remain a key player in international markets there’s a need to continuously improve technologies, products and services quality. Exporters may take advantage of research and development studies.

In the process of preparation for exports, companies need to conduct a research that will help them choose a market, which will contribute to the maximization of the benefits and minimization of the risks.

Research will also help managers decide not only on the markets to enter but also on the modes of entry. When deciding on these issues, the companies need to gather information on the following parameters:

Information on the market availability: This should be the first phase in the process of research. If the result of the research shows that there are many barriers for entry on a certain market, then the company should reconsider the decision to go on that market. This is the phase where companies should collect information on the trade policy, tariff and non-tariff barriers, regulations regarding the exports and imports of the country, developed trade relations with different countries and trade groups etc.

Information on the business environment: The second phase in the process of research is analysis of the business climate and environment of the potential markets. At the same time, this is the most critical stage in the information gathering process as it helps in the development of clear picture of the markets in the selected countries and the opportunities that are offered. The most important components to be analyzed are the economic and political-legal environments and their factors affecting the operations of the companies.

Information on the size and potential of the markets: Demographic characteristics of the markets (number of inhabitants, growth rate, population density, age structure), geographic characteristics (area, climate, topography), economic parameters (gross domestic product, GDP per capita, GDP growth rate, purchasing power, income level, average salary, consumption of different category types, economy growth, industry growth), technological parameters (actual production technology, planned technological development, investments in technology, Internet users, level of development of the information and communication network, investments in hardware and software), educational characteristics (educational system, students enrolled, foreign languages learned in schools, graduated students, graduated students according to the level of education, number of master students, number on PhD students) and socio-cultural characteristics (dominant religion, dominant values, life style, ethnical groups etc.).

Information on the economic and market infrastructure, including information on the availability of resources, costs of the resources, availability and qualification of the workforce, availability of capital, insurance etc.

Information on the communication infrastructure, including information on the road network, air transport, telecommunication conditions, logistics centers, logistics network, distribution systems, availability, importance and power of media, opportunities for promotion, retail infrastructure, wholesale etc.

Information for the market of the specific product: Sales and availability of the specific product, use of complementary or substitute products, competition etc.